Oncolytics Biotech, Inc.Technology Changing Life

Photograph by: Gavin Young, Calgary Herald

THE COMPANY

A Novel Approach to Cancer Therapeutics

Oncolytics Biotech is a biotechnology company focused on the development of oncolytic viruses as potential therapeutics for use in a broad range of cancers. The Company is conducting clinical studies using REOLYSIN®, its proprietary formulation of the human reovirus, in some of the most prevalent forms of the disease including lung, colorectal and pancreatic cancers. Oncolytics' clinical program includes a number of human trials at a variety of stages including a Phase III trial in head and neck cancers. The Company has advanced its product manufacturing and intellectual property initiatives in parallel with its clinical development program to support development of a commercial product.

o Enrollment complete randomized international study (REO 018) of REOLYSIN® in combination with carboplatin and paclitaxel in platinum- refractory recurrent head and neck cancer patients – the supportive

Data publication of the Phase III H&N : PFS data from the first 160 patients - REO 018, the Phase III SCCHN Trial data now separated into two distinct sub groups... "local recurrent disease, with or without metastases, and patients with distal metastases" - >Recruiting completed in the US, Canada, Belgium, UK. Italy, Spain, and Russia. See November 21 2013 press release describing preliminary results of the first sub group. See Sept 12 2012 press release regarding the analysis of unblinded data from the first 80 patients. "The Company has consulted with its principal investigators and the independent statistician for the study, and, on September 10, 2012, met with the U.S. Food and Drug Administration in Washington, D.C. Based on these discussions, the Company plans to expand enrollment in the first stage of the study to include 160 patients, all of whom have now been enrolled. Oncolytics intends to treat this expanded first stage of the REO 018 clinical trial as a separate supportive study to a planned registration study that will be similar to, and take the place of, the original second stage of the REO 018 clinical trial."

Conducting multiple Phase I/II, Phase II REOLYSIN clinical trials in the United Kingdom and the United States and one Phase III .

Positive interim and final data emerging including clinical responses in lung, liver and nodal metastatic disease

Collaborative agreements with the National Cancer Institute of the US and the NCIC-CTG Canada, the University of Leeds, and the Cancer Therapy & Research Center at the University of Texas Health Science Center in the U.S. to conduct multiple clinical trials.

Reovirus, an acronym for Respiratory Enteric Orphan virus, is generally believed to inhabit the respiratory and bowel systems in humans. Reovirus is found naturally in sewage and water supplies. By age 12, half of all children show evidence of reovirus exposure and by adulthood, most people have been exposed. However, the disease is non-pathogenic, meaning there are typically no symptoms from infections. The link to its cancer-killing ability was established after the reovirus was discovered to reproduce well in various cancer cell lines.

Using improved microscope technology, a team including Purdue's Timothy S. Baker and a colleague at Harvard has determined the structure of a reovirus (short for "respiratory enteric orphan" virus) down to the 7.6-angstrom scale, better than twice the 18-angstrom resolution previously available. http://www.purdue.edu/UNS/html4ever/031215.Baker.reovirus.html

Synchrotron radiation is the only tool available for the determination of very large molecular structures at high resolution such as the reovirus core. One of the largest structures solved to-date has been reported from work carried out at MacCHESS by Karin Reinish in the Harrison group at Harvard. The reovirus core is a macromolecular assembly with a molecular mass of 52 million. The core synthesizes, modifies, and exports viral messenger RNA. The core contains five of the eight proteins that make up a complete virion and is about 700 Angstroms in diameter. They crystallize in a centered cubic space group with unit cell dimensions of 1255 Angstrom with crystal growth requiring 9 to 12 months. Using the CHESS F1 facility, one of the two Biosafety Level 2 facilities in the US, scientists have been able to "see" into the three-dimensional structure of the core using the tools of x-ray crystallography.

The reovirus core particle shows the subunits in different colors. There are 120 copies of the part in red that forms the shell and that packages the RNA. This part defines the symmetry and size of the particle. Other subunits, shown in yellow, green and white stabilize the shell. The blue parts form turret-like structures around the fivefold axes that exports mature mRNA into the cytoplasm of the infected cell.

THE PRODUCT

REOLYSIN®

is a proprietary variant of the human reovirus that acts primarily as a direct cytotoxic agent. Reovirus is naturally occurring (not genetically engineered) and has been demonstrated to replicate specifically in tumour cells bearing an activated Ras pathway, leaving healthy normal cells intact. At least two thirds of carcinomas and more than 90% of metastatic disease has Ras involvement.

Mechanism of Action

The reovirus, or Respiratory Enteric Orphan virus, has been demonstrated to replicate specifically in tumor cells that have a constitutively activated Ras pathway. Activating mutations of Ras and mutations along the Ras pathway occur in approximately two-thirds of all tumors. Tumors bearing an activated Ras pathway are deficient in their ability to activate an anti-viral response mediated by the host cellular protein, PKR. Since PKR is responsible for preventing reovirus replication, tumor cells that lack the activity of PKR are susceptible to reovirus infection and eventual cell death. As normal cells do not possess Ras activation, these cells are able to thwart reovirus infection by the activity of PKR. In a tumor cell with an activated Ras pathway, the reovirus is able to freely replicate and kill the host tumor cell. Progeny virus particles are then able to infect and kill surrounding cancer cells. This cycle of infection, replication and cell death is believed to be repeated until there are no longer any tumor cells carrying an activated Ras pathway available.

The Company's technologies are based on discoveries made in the 1990s in the Department of Microbiology and Infectious Diseases at the University of Calgary. The potential products are being developed using the naturally occurring reovirus for treatment of cancers in humans.

In mid-2009, the U.S. FDA approved revisions to labeling of the epidermal growth factor receptor (EGFR) class of antibodies, indicating that colorectal patients who have KRAS mutations in their tumours do not respond to EGFR-inhibiting antibodies and that the use of this class of pharmaceuticals is not recommended for these patients.

REOLYSIN, Oncolytics' proprietary isolate of the reovirus, preferentially replicates in cancer cells that have an activated RAS pathway. Approximately two-thirds of all cancers have an activated RAS pathway, including most metastatic disease. A large number of mutations, including mutations in EGFR, Her2 or KRAS along the RAS pathway lead to RAS pathway activation. A significant clinical opportunity for REOLYSIN is in the treatment of patients with metastatic cancers who have a mutated KRAS gene and are unlikely to respond to treatment with anit-EGFR monoclonal antibodies.